Category Archives: Young Adult

Here’s how the credit card companies work. If you are a freshman you will undoubtedly be a target so pay attention.

Every year the college campuses are canvased from Dorm to quad with those fold out party tables, you know the ones, those long fake wood finish ones you’ve played beer pong on for years now. On them are credit card applications and “free gifts” just for filling them out! no sir, you don’t even have to be approved and we will give you this frisby or if you prefer an energy sports drink!

You walk through campus and feel like an adult for the first time in a long time. You did it man, you’re there and now you are an adult. No parents, no rules. Some hot blonde walks up to you and asks for a moment of your time. With chin on floor you drool as she explains the program to your now vacant mind.They play off what you’re feeling, cause let me tell you that you feel the same way everyone else did their freshman year and she knows it. <That’s called taking advantage 😉 > So you fill out out this short form, take your plastic disc and go on your way. Dude, she was so into me.

Then it comes. Your first credit card. A little plastic ticket to the world. Your parents always told you “you need to use credit to build credit”, and so you do. You figure that a few red bulls or a new Laptop will help your education, so you make a few purchases $5 for a latte, $30 to fill your I pod…oh crap…latte stain on the jeans, well I needed a new pair anyhow.

8 weeks later you get the bill and have an aufully hard time figureing out how you spent $600 in a month when you swore you would only use it for emergencies and then “pay it right off”. Well,you don’t have $600 to send them and the minimum payment is only $35……cool I’ll send the$35 now and pay it back in the next month or two.

You been scammed sucka.

Here is the truth behind credit. You don’t NEED it. It is in fact a usefull tool and no matter what I say you are going to sign up for a card, that’s just how it is. So take these precautions when you do:

1- Leave it at home. Why? If you don’t bring it with you unless you need it for a specific reason like say to pay your tuition, buy a school book or make a payment that REQUIRES you to use it, you don’t let those $5 purchases add up. You got into college, I’m pretty sure you can scrape up $5 for a coffee.

2- Register your card online. Why? You can go to the website on the back of the card and sign up. This will let you pay your bill online in case you forget to mail it out. Which you will.

3- Leave your check book with your card. Why? Stop asking questions and let me explain! When you use your card, immediatly write a check for that amount and send it out. This way your card is always paid on time, no late fees, no negative credit reports. If you pay online, keep it by your computer and do the same thing.

4- Understand interest. It does’nt seem like much, but it adds up very quickly and can multiply overnight. You take an average of 70 years to pay off each purchase if you make minumum payments and overpay by thousands of times! Do you want to pay $2300.00 for a doughnut? Did’nt think so.

5- Learn about finance. This should really be #1 on the list. If your school offers courses, take them. If not, use the internet and read up. If not, have fun with your cash while it’s there, cause it won’t be for long.

The first and easiest thing anyone can do to take control of their own money is take a look at your bank accounts. More specifically, the rate and fee structures of said bank. Banks are a business, pure and simple. They are there to make money, off of you, by holding your money and lending it out. But most banks nowadays make a killing off of charging YOU fees every chance they get. Need to take money from an ATM? $1.50 please. Accidentally write a check for $5.00 when you had $4.98 in your account? “Sure we’ll pay the 2 cents for you…..that’ll be $30.00 please.”
Learn how much your bank charges you and for what. If you don’t know, you can sit down with a personal banker next time you are there and ask them to explain your accounts to you. If you happen to save all your paperwork like some of us do, simply go back and dig it out, it’s a good read and can save you a ton in fees.

Here are just a few examples of your money going into your banks’ pocket:

-ATM fees- You pay the ATM owners fee of anywhere from$1.00 – $3.00 or more, but your bank may charge you a fee on their end matching or even beating(higher than) the original fee!

-Overdraft fees- Every bank charges overdraft fees and it’s up to you to know how much. One of my now former banks used to charge $35.00 for overdrafts, even if it was only $0.02 as in the above example.

-Account maintenance fees- What are they maintaining? never mind, I don’t want to know, but many banks charge you fees every month just to have your account open! I was charged $5.00 a month for an account I rarely used! There are plenty of banks that charge NOTHING, find one and use it.

In my experience credit unions are the way to go. My current account earns over 1% when the old ones never payed more then 0.1%. The Maximum overdraft fee is $2.50. There are NO maintenance fees and they offer free online banking with bill pay services.

Great banks are out there, take an hour to do research and you save yourself countless dollars in the long haul.